Five Reasons Why You Need Business Brokers

Not all business sale transactions conclude with a positively profitable outcome for everyone.  But when they do, it is because the business broker did his job well and at a timely manner.  When it is time executing your exit strategy, it is much more advantageous if you let an expert work with you.  It ensures smooth transactions from start to finish, with an outcome that you are very happy with. 

1.       Business Brokers can help you prepare your business for sale.  Because they have the experience, you can benefit from the advice they can give you.  This will help enable you to reach the full potential of your business as a viable business venture that is attractive to Sydney’s buying market.

2.       Business Brokers have access and insight into the Sydney business market.  There are hundreds or even thousands of businesses up for sale and there are enough buyers that are interested to buy.  The tricky part is to match the right buyer to the right seller.  This is an insight to which business brokers are privy to.  Selling your business without a broker may very well end with an unfavorable match which could end in regret.

3.       Business Brokers close deals in time. The amount of experience in the Sydney business sales market allows business brokers to breeze through the whole process in record time.  This is because they have streamlined the work and have already eliminated unnecessary steps.  

4.       Business Brokers already have a network of people required to close the deal. This is one of the reasons why business brokers are able to complete transactions in time aside from direct access to the market. They already have a network of trusted lawyers, accountants and consultants.  They also have a good relationship with Sydney’s financial institutions. Building this network and forging this level of trust takes time.  The good news is that you have access to this network if you sign up with a Sydney business broker.

5.       Business Brokers have the negotiation skills needed to get the best terms. Skills are learned and perfected over time and it is the same with sales and negotiation skills.  Sydney’s market is as diverse as its population.  Negotiations are based on the needs and goals of both buyers and seller. Coming up with the best terms for both parties is seldom achieved without the expertise of a business broker.  It is his job to “sell” your business and make it look good for the buyer; it is also his job to close the deal without compromising your projected sales.

Business Cash Advance – How it works

Small businesses need funding as much as big corporations does but the business loan models that work for big corporations usually are not applicable to the needs of most small businesses.  There was a time when financial institutions like banks and credit unions process most business loans universally. A large portion of the existing small business and startups’ funding needs are not met, others are overburdened by the monthly payments and tight policies that they have no choice but to close down. 

About a decade ago, the business cash advance loan structure was introduced and while it was met by much skepticism by economists and financial analysts.  Small business owners however, found that it was just the right kind of small business funding that they require.  The business cash advance is similar to a payday loan but the process is tailored specifically for small businesses.   For one, the application and evaluation process takes days and not months and the minimum amount loanable is manageable enough for any small business to handle

What is usually required?

While the business cash advance facility is design to make access to funds easier and faster, there are a few qualifications in order to make the whole process work.

·         The business should have an EFTPOS (electronic funds transfer at point of sale) to process payments.  Should be able to accept major credit cards or preferred cards by the financing company. This is needed because the payment is made on a daily basis through the debit/credit card processors.

·         A minimum monthly credit card or debit transactions. This rate varies depending on which business cash advance provider you approach but it is usually somewhere between $5,000.00 to $10,000.00 credit card/debit card sales per month. 

·         The business should be operating for a minimum of 12 months. This allows the provider to assess cash flow and allowable cash advance amount.

·         The usual businesses that may take advantage of this type of funding source are those who transact daily such as restaurants, retail stores or gift/novelty shops, bakeries, salons etc.

How it works

Approval is usually within a period of 5 to 14 days, and the business owner is given a lump sum which may reach up to 100% of the total monthly sales.  There is an agreed percentage which is automatically deducted from the daily sales and payments are automatically debited to the business cash advance provider’s account.

There is no interest rate, no fixed payment term or payment schedule.  The length of the term will depend on your sales.  The higher the sales, the faster the “loan” gets paid.   

Preparing To Sell Your Business to the Right Buyer

So you have worked hard and are very proud of the enterprise you have established.  For people like you, the business is already a part of who you are and a point of pride.  The decision to sell the business will have an entirely different from someone who wishes to sell for a profit. For people who are considering retiring and selling the business is the only option, it is a good idea to prepare the business in order to attract a wide variety of prospective buyers.  The more prospects you attract the better chances of finding the right person to take your place. 

·         Make yourself obsolete – Make sure that the business can run on its own.  Standard operating procedures should be in place and the best way to do this is to document everything.  Documentation is a very useful tool in daily operations, whether it is manufacturing or trading or in sales.  There should be an existing database from clients to inventory or just how things are done.

·         Make sure your financial documents are up to date – Businesses are evaluated based on numbers.  Most buyers go straight to the audited financial statements and as a seller; you have to make sure they are as attractive as it can be.  There are businesses that minimize their taxable profits but while it may be good for your business, it does not give the buyer an actual picture of how your business is doing.  So prepare your financial portfolio 2 years ahead of time and start recording your actual profits.

·         Create a business plan as if you are not about to sell it. – This gives your buyer a better view of their future if they decide to purchase.  If you have this ready, it is easier for them to decide.  They may make their own feasibility study but your input will definitely speed things up.

·         Feature your core values in your business plan – if you really want to attract a buyer who share the same principles as you have established, this feature in the business plan is sure to attract the ones whose business objectives are aligned to yours.  This would ensure a better transition a as if management and ownership has not changed especially if you wish to secure the tenure of your existing employees.

·         Sign up with a business broker who values your objectives as much as they value the sale - You should keep this in mind especially if you are selling primarily to ensure that your business is intact when you retire.  Letting go difficult but if you know you are leaving everything to the right people, it would not be such a big deal at all.